Impermissible to use Section 45 PMLA as a tool for incarceration, rules Delhi HC in Bhushan Steel bail decision

New Delhi: The Delhi High Court has granted bail to two former Bhushan Steel Limited (BSL) officials involved in a ₹46,000 crore money laundering case, ruling that the stringent bail provisions under Section 45 of the Prevention of Money Laundering Act (PMLA) cannot be used to detain the accused indefinitely amid delays in the trial process. The decision was issued by Justice Manoj Kumar Ohri, who underscored that when trial proceedings are prolonged due to extensive evidence and numerous defendants, the accused cannot be kept in custody solely under Section 45 of the PMLA. The judge emphasized that it is the role of Constitutional Courts to uphold personal liberty as enshrined in Article 21 of the Constitution, particularly when the delay is not attributable to the accused.

“Liberty cannot be indefinitely restricted under Section 45 without considering other relevant factors. When the trial is evidently unable to conclude within a reasonable time, Section 45 cannot be used to justify excessive detention,” observed the Court in its October 24 order. The officials, identified as Pankaj Kumar Tewari and Pankaj Kumar, had been held in custody for over nine months before receiving bail. Both were senior executives in BSL's finance and accounts departments and were accused of facilitating the alleged money laundering activities of BSL's former promoters. In its order, the Court noted that the PMLA’s strict bail provisions must be balanced with the fundamental rights of the accused, including their right to a speedy trial under Article 21. The Court held that in cases where strict bail conditions conflict with constitutional safeguards, particularly those guaranteeing liberty, the latter must take precedence.

Highlighting that “bail is the rule and jail is the exception,” the Court affirmed that Constitutional Courts retain the authority to grant bail in instances where prolonged detention contravenes the principles of liberty and justice. It was also noted that the main accused in the case and other co-defendants had already been granted bail, strengthening the case for the applicants. Given the ongoing trial delays, the fact that the principal accused are out on bail, and the substantial time the applicants have already spent in custody, the Court ruled in favor of releasing the two BSL officials on regular bail under specific conditions. Representing Tiwari, Senior Advocate Sanjay Jain led a team from Legal Scriptures, supported by advocates Abhijit Mittal, Anukalp Jain, Shaivya Singh, Nishank Tripathi, Pulkit Khanduja, Palak Jain, and Harshita Sukhija. Pankaj Kumar’s defense was led by Senior Advocate Rebecca John, with support from advocates Tapan Sangal, Dharmendra Singh, and Pravir Singh. The Enforcement Directorate’s case was argued by Special Counsel Manish Jain along with advocates Sougata Ganguly, Snehal Sharda, and Gulnaz Khan.